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Criticism of Boies Schiller Discovery Tactics in NY Case
Wednesday, May 18 2005 @ 10:34 AM EDT

The New York Observer is reporting that the judge in a New York case, Fears v. Wilhelmina Model Agency, Inc., approved a $22 million settlement for the plaintiff models, but has criticized their lawyers -- Boies, Schiller & Flexner were the lead counsel -- and granted the attorneys millions less than they asked for in attorneys' fees. Reason? Their behavior in discovery.

They asked for $8,875,164.65 in attorneys' fees, but were awarded only $3,759,583.16 plus expenses of $1,590,164.65. The case was about price fixing. And here's the Order [PDF], dated May 5, 2005.

The article explains why the lawyers were awarded more than $3 million less than they asked for:

"Certain conduct in which class counsel engaged during the discovery phase of this litigation," Judge Baer wrote.

He cited three sanctions that the magistrate judge (who oversaw the lengthy discovery process) issued against the models’ counsel after motions filed by Mr. Golub: charges of $5,000, $250 and $25,000 (the latter stayed by Judge Baer) for what the magistrate judge called their "failure to respond appropriately to interrogatory answers."

"[P]laintiffs have unnecessarily made the straightforward task of responding to interrogatories a difficult and grueling process," wrote the magistrate judge in a passage cited by Judge Baer. "I am left with the firm conclusion that plaintiffs’ counsel determined they were going to provide discovery in the manner that they saw fit, notwithstanding the Federal Rules of Civil Procedure and notwithstanding my prior Orders."

It seems they did things like filing 270 separate interrogatories, instead of what the court ordered, consolidated interrogatories, so that the other side had to answer each one separately. Ultimately it cost them millions. They paid a fine too, as you can see from this docket entry:

209 Filed: 09/19/2003
Entered: 09/24/2003 Order
Docket Text: ORDER; next appliction to compel identification of the confidential source referred to by pltffs' counsel was denied on the ground that Next has not served an interrogatory requesting the identification of such a source ; Elite's application for a protective order restricting pltffs' ability to disclose the documents designated EL4052-EL4835 was denied. In order to permit Elite to take an appeal, I stay my order concerning these documents for a period of 48 hrs. ; a sanction in the amount of $250.00 was imposed on pltffs' counsel as a result of pltffs' false and gratuitous references to Mindel's purported criminal record in pltffs' response to Click's interrogatories. Such sanction is payable to the Clerk of the Court no later than 9/22/03 ; next and Wilhelmina were ordered to produce all non-privileged e-mails responsive to pltffs' documents requests no later than 9/19/03. The applications of these defts to shift the costs of such production of pltffs was denied. ; ( signed by Magistrate Judge Henry B. Pitman ); (sac) Modified on 09/24/2003

The article notes that in addition to the Habie case the firm was just thrown off of by the judge (they are appealing), there have been other issues:

As reported in Forbes, this isn’t the only time that Boies, Schiller and Flexner (which was not singled out in Judge Baer’s order and opinion) has been punished with sanctions. In 1998, a judge fined Mr. Boies and his client $46,000 for filing a "barely sensible" motion in New York State Court. In 2003, the Second Circuit Court of Appeals called a lawsuit Mr. Boies had filed on behalf of Hard Rock Cafe founder Peter Morton "frivolous" and ordered a mild slap on the wrist; Boies Schiller and another firm had to pay the defendant’s legal costs—times two.

If you are interested, here's the complaint. Here is a summary of the class action issues. And here are excerpts from the Order with regard to attorneys' fees, in which the judge explains how he did his math:

B. REASONABLE ATTORNEYS’ FEES

1. Legal Standard

“As in every class action, there are a number of factors that enter into the Court’s decision with respect to fees.” Thompson, 216 F.R.D. at 71. In particular, and pursuant to Goldberger and its progeny, a reasonableness assessment requires the Court to evaluate: (1) the time and labor expended by counsel, (2) the magnitude of the litigation, (3) the risk of the litigation, (4) the quality of representation, (5) the requested fee in relation to the settlement, and (6) public policy considerations. Goldberger, 209 F.3d at 50. The ultimate determination of a reasonable fee award is within the district court’s sound discretion. Id. at 47.

2. Attorneys’ Fees Analysis

According to plaintiffs’ counsel, a fee award of 33.3% of the Fund, plus reimbursements of actual expenses, is fair, reasonable, and in accordance with the Second Circuit’s decision in Grinnell. In contrast, Defense counsel maintains that such an award is “shamefully high” and vigorously oppose such an award. (Ltr. from Gotkin, Att’y for Next, to Judge Baer, dated Feb. 11, 2005.)

a. The Time and Labor Expended by Counsel

The first Goldberger factor, and “the traditional criteria in determining a reasonable common fund fee,” requires consideration of the time and labor expended by counsel. Goldberger, 209 F.3d at 50. In total, eight firms, including partners, associates, paralegals and support staff, represented the class. Andrew Hayes served as lead counsel for the plaintiffs in this litigation. He is a partner at Boise, Schiller & Flexner, LLP (“Boise Schiller”). (Hayes Decl. at ¶ 1.) Boise Schiller logged a total of 18,834.7 hours on this matter. (Hayes Decl. at ¶ 4.) 7 At its current rates, approximately $500.00 per hour for Andrew Hayes, the firm estimates the total lodestar amount for professional time spent is $5,540,571.00, plus $714,333.98 in unreimbursed expenses. (Hayes Decl. at ¶ 4; Hayes Suppl. Decl. at ¶ 3.)

The other firms and individuals involved in this litigation claim less fees. . . . According to lead counsel for plaintiffs, Andrew Hayes, when taken together, the attorneys logged approximately 28,000 professional hours on this matter. (Hayes Decl. ¶ 91.) The lodestar calculation for professional time expended by Plaintiffs’ counsel was estimated at $8,816,275, plus $1,590,164.65 in unreimbursed expenses. In addition, according to Hayes, if you include in the total lodestar the 335 additional professional hours from the four additional counsel who worked on specific discovery tasks, “the total lodestar is estimated at $9,112,160.00.” (Supp. Decl. Hayes at ¶¶ 3, 5.) Because I have concluded to award fees on a claims made basis, the lodestar calculation is primarily for crosscheck purposes. See Wal-Mart Stores, 396 F.3d at 121. . . .

c. The Risk of the Litigation

“[C]ontingency risk and quality of representation must be considered in setting a reasonable fee.” Goldberger, 209 F.3d at 54; see In Re: Medco Health Solutions, Inc., Pharm. Benefits Mgmt. Litig., No. 03 MDL 2004, 2004 WL 1243873, at *11 (S.D.N.Y. May 25, 2004).

Plaintiffs’ success was never a sure thing. During the course of the litigation, Plaintiffs’ counsel defended against various motions to dismiss (Dckt. No. 21, 29, 34, 39, 43, 45, 47, 52, 62, 66, 99, ect.), an order to show cause (Dckt. No. 66), and summary judgment motions (Dckt. 211, 227, 247, 248, 251, 263, ect.). Discovery began in 2002, continued throughout the litigation and up to the commencement of trial in June 2004, and included at least 24 discovery conferences before Magistrate Judge Henry Pitman.

Due to the contingent nature of the lawsuit, had the trial continued, and Class Plaintiffs were unsuccessful, Plaintiffs’ counsel would have received no compensation. As the litigation evolved, Class Counsel advanced tens of thousands of dollars in disbursements. See In re NASDAQ Market-Makers Antitrust Litig., 187 F.R.D. 465, 488 (S.D.N.Y. 1998) (“Risk, of course, must be judged as it appeared to counsel at the outset of the case, when they committed their capital (human and otherwise)”); see also Harman v. Lyphomed, Inc., 945 F.2d 969, 976 (7th Cir. 1991).

Accordingly, the manner in which this case unfolded demonstrates the significant possibility that Class Counsel could have failed to achieve any recovery at all and, consequently, no compensation. . . . .

Upon review of plaintiff counsels’ resumes and achievements, and with due consideration both to the $21,855,000 Fund and the formidable opposition from nationally recognized and respected law firms, the quality of representation appears to be satisfactory. Furthermore, in my view, in having brought this lawsuit, the plaintiffs’ lawyers performed a valuable public service for which they are to be commended.

All that having been said, praise for Plaintiffs’ counsel must be tempered by certain conduct in which class counsel engaged during the discovery phase of this litigation. That conduct prompted Defendants, Click Model Management and Next Management Company, to move for sanctions pursuant to Fed. R. Civ. P. 26, 37(b) and 41(b) for Plaintiffs’ failure to properly respond to interrogatories. See Fears, No. 02 Civ. 4911, 2004 WL 1065543, (S.D.N.Y. May 11, 2004) (Pitman, J.). In his decision, the magistrate judge condemned plaintiffs’ counsels’ behavior throughout the discovery process, mentioned two prior sanction orders, which imposed fines of Two Hundred Fifty Dollars ($250.00) and Five Thousand Dollars ($5,000.00), and went on to sanction counsel $25,000 dollars plus reasonable attorneys’ fees as follows:

[P]laintiffs have unnecessarily made the straightforward task of responding to interrogatories a difficult and grueling process. I am left with the firm conclusion that plaintiffs’ counsel determined they were going to provide discovery in the manner that they saw fit, notwithstanding the requirements of the Federal Rules of Civil Procedure and not withstanding my prior Orders. Such a tactic is, of course, unacceptable and richly deserves the imposition of a sanction.

Counsel’s conduct is particularly disturbing because their failure to respond appropriately to interrogatory answers here is not an isolated event. I have had to sanction plaintiffs’ counsel on two prior occasions for discovery shortcomings. Despite these prior sanctions, it appears that plaintiffs’ counsel’s {sic} still unwilling to comply with the Federal Rules of Civil Procedure and my Orders implementing those rules.

Id. at *6 (Pitman, J.). Considering Judge Pitman’s language, it would be unreasonable for me not to consider this behavior in my decision and this despite defendants’ representation that they would agree not to oppose a motion to vacate. Settling parties sometimes makes strange bedfellows.

I am obligated to review the quality of plaintiffs’ counsels’ representation, and that review must “eschew any rubber stamp approval,” put another way, attorneys’ conduct throughout the litigation must be factored into the quality of representation analysis. Thompson, 216 F.R.D. at 61 (citing to Grinnell, 495 F.2d at 462).

Accordingly, I have reduced the sought for fee award to include and emphasize my concern on this score.


  


Criticism of Boies Schiller Discovery Tactics in NY Case | 107 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections here Please.
Authored by: josmith42 on Wednesday, May 18 2005 @ 10:36 AM EDT
For the [nearly] flawless PJ...

---
This comment was typed using the Dvorak keyboard layout. :-)

[ Reply to This | # ]

Off topic here
Authored by: josmith42 on Wednesday, May 18 2005 @ 10:40 AM EDT
For those things not specifically related to this article, but still of interest
to Groklawians...

---
This comment was typed using the Dvorak keyboard layout. :-)

[ Reply to This | # ]

SCO Ship going down
Authored by: Anonymous on Wednesday, May 18 2005 @ 10:44 AM EDT
I want to know what PJ was holding in her hand ( the one behind her back ) in
the cartoon with SCO sinking to the deep.

Was it perchance a can opener ?
Porthole window ?

PJ - Do tell..

[ Reply to This | # ]

Why lawyers are viewed with disdain - Another shining example. nt
Authored by: Anonymous on Wednesday, May 18 2005 @ 10:44 AM EDT
.

[ Reply to This | # ]

Costs
Authored by: Anonymous on Wednesday, May 18 2005 @ 10:49 AM EDT
Q: Sometimes costs are awarded to the plaintiff and sometimes costs are awarded
to the defendent. What is the difference?

A: There is no difference. The money always goes to the lawyers.

This is is a UK joke. It would seem that the situation in the US is somewhat
different.

Alan(UK)

[ Reply to This | # ]

  • Costs - Authored by: KW on Wednesday, May 18 2005 @ 11:08 AM EDT
  • Costs - Authored by: Anonymous on Wednesday, May 18 2005 @ 01:06 PM EDT
  • Costs - Authored by: inode_buddha on Wednesday, May 18 2005 @ 02:47 PM EDT
    • Costs - Authored by: Anonymous on Wednesday, May 18 2005 @ 04:14 PM EDT
Another feather in Boise's Cap
Authored by: webster on Wednesday, May 18 2005 @ 11:13 AM EDT
Another winner for Boise. He won millions for his clients. He not only stood
up to the other side, he stood up to the judges. You have to consider lawyers
like this. They fight to the ultimate. They put their wallets and reputations
on the line for you. They plowed through the Magistrates orders as if he wasn't
even there.

Of course they will have to console themselves with only half of their
anticipated fee, a rate of only $250/hour. Worse yet, other parties and judges
will see this sanction and keep a watch on them, cite this order, and even move
other judges to pile on. They are just going to have to raise their rates and
charge more time.

IANAT, just perspicatious.

---
webster

[ Reply to This | # ]

Criticism of Boies Schiller Discovery Tactics in NY Case
Authored by: nathan.sidwell on Wednesday, May 18 2005 @ 11:20 AM EDT
How often does this kind of thing happen? I don't know if PJ is merely
highlighting the Boies & Schiller cases, and other firms have equally many.
Is it the sort of thing that happens in X% of cases or does it happen to X% of
lawyers?

[ Reply to This | # ]

So is it 'Boies' or 'Boise'?
Authored by: Anonymous on Wednesday, May 18 2005 @ 11:23 AM EDT
I'm confused :)

[ Reply to This | # ]

Criticism of Boies Schiller Discovery Tactics in NY Case
Authored by: blacklight on Wednesday, May 18 2005 @ 11:28 AM EDT
PJ comes through with her research, as usual: I am looking forward to IBM
showing it to judge Kimball at some point in the future, asking that SCOG and/or
BOIES compensate IBM at twice the IBM lawyers' corporate rate.

[ Reply to This | # ]

Here comes da judge!
Authored by: ray08 on Wednesday, May 18 2005 @ 11:36 AM EDT
Hello! Judge Kimball, Judge Wells? Please take note of SCO's counsel's tactics!
I hope you can see a pattern here.

IBM counsel, it's your responsibility to jump on this.

---
Caldera is toast! And Groklaw is the toaster! (with toast level set to BURN)

[ Reply to This | # ]

Yet another incredibly timid judge!
Authored by: Anonymous on Wednesday, May 18 2005 @ 11:46 AM EDT

If one side or the other of a case is deficient in producing as ordered by the judge, then the likely outcome of that action is the wrong verdict. The correct action by a judge in this case is to decide the case in favor of the "other side" when the judges orders are ignored. "Triming fees" that were insane to begin with is a non-punishment, and a non-remedy. BSF will do exactly the same thing next time, because the behavior help get the verdict they wanted, whether it was just or not.

[ Reply to This | # ]

Searchable PDF
Authored by: rsteinmetz70112 on Wednesday, May 18 2005 @ 12:00 PM EDT
This is I think this the first legal document that is a searchable PDF, All of
the others have been scanned images.

---
Rsteinmetz

"I could be wrong now, but I don't think so."
Randy Newman - The Title Theme from Monk

[ Reply to This | # ]

Criticism of Boies Schiller Discovery Tactics in NY Case
Authored by: Rann on Wednesday, May 18 2005 @ 12:44 PM EDT
Counsel’s conduct is particularly disturbing because their failure to respond appropriately to interrogatory answers here is not an isolated event. I have had to sanction plaintiffs’ counsel on two prior occasions for discovery shortcomings.

To my eye this implies that there at least 4 cases now where Boies Schiller overstretched the bounds of discovery BEFORE the present SCOG-IBM discovery fiasco..... Rann

[ Reply to This | # ]

Misconduct in Discovery
Authored by: jdg on Wednesday, May 18 2005 @ 02:04 PM EDT
The Perelman/Morgan Stanley trial was just decided based on Discovery
malfeasence by MS. The judge ruled that failure by MS to trun over e-mails
resulted in a default judgement against MS on those issues and almost guaranteed
the verdict against MS.

I think that tSCOg has been hoping against hope that they can get similar
rulings that by asking for not only the earth's moon but also the numerous
discovered and not-yet-discovered moons of both Saturn and Jupiter that there
would be "relevant" material that would not get found and that they
would get a "walkover"-type win.

Of course, the opinion of many on this board is that tSCOg has been guilty of
such failings, but they have little to lose (hey, they would be close to
bankrupt now without this case and its related cash infusions).

---
SCO is trying to appropriate the "commons"; don't let them [IANAL]

[ Reply to This | # ]

WHAT MATTERS : Criticism of Boies Schiller Discovery Tactics in NY Case
Authored by: Anonymous on Wednesday, May 18 2005 @ 02:16 PM EDT
What matters: At the end of the day Boies Schiller still won money for their
clients. I am sure the clients do not care how they did it. And I sure SCO does
not care either.

[ Reply to This | # ]

Criticism of Boies Schiller Discovery Tactics in NY Case
Authored by: tredman on Wednesday, May 18 2005 @ 02:31 PM EDT
In regards to the venue clause in the Project Monterey agreement, it's no small
wonder that BSF doesn't want to take the fight to NY. Seems they've nurtured
quite the reputation up there.

I'd probably want to litigate anyplace else but New York if I'd been spanked
that many times.

What I want to know is this: Obviously many of us are just seeing the news
presented in PJ's article for the first time. Since judges do talk, and
probably by necessity must keep a close eye on what's going on elsewhere (even
if it's not in their own district), how long would Judge Kimball have know about
this particular instance?


---
Tim
"I drank what?" - Socrates, 399 BCE

[ Reply to This | # ]

In the SCOG case, blame for this cannot be limited to BSF
Authored by: skidrash on Wednesday, May 18 2005 @ 04:00 PM EDT

because we knew Tibbits's beliefs beforehand, and he is completely sympatico
(AFAICT) with the BSF stance.

[ Reply to This | # ]

"...strange bedfellows..."
Authored by: webster on Wednesday, May 18 2005 @ 04:37 PM EDT

Considering Judge Pitman’s language, it would be unreasonable for me not to consider this behavior in my decision and this despite defendants’ representation that they would agree not to oppose a motion to vacate. Settling parties sometimes makes strange bedfellows.

In a case like this where there is a provision for attorney fees that must be approved by the court, it gets very strange indeed. One strategy of a defendant is to make an offer that the plaintiff likes but that the plaintiff's attorney does not like. It is not unusual for the parties to obtain independent counsel over the fees and the settlement offer. It can be a way to drive a stake between the plaintiff and their counsel. The plaintiff may be happy with the cash in the offering. The attorney only sees his toil, long boring hours, being compromised at a paltry rate. The converse is also apt: the attorney may like the settlement and the plaintiff not.

In this instance the parties appeared to agree on the plaintiff's award, $22 million, and the attorney fees, $8.9 million. The Judge backed up his Magistrate in an extremely severe manner. He cut most of the fee, $5.1 million, and paid $3.8 million. I wonder how the Boise partners are going to accommodate this. Maybe they will make the strategists in question absorb the loss. Alas, this is becoming fashionable among the judges. It is a colossal hit and worth an appeal as difficult as that may be. Maybe the Court of Appeals will give them a million back. Unfortunately, you can't settle with a judge.

BTW it will be difficult to accuse Boise of discovery abuse in the SCO case. They have not purported to disclose that which they do not have, i.e. evidence. And they have not abused IBM with discovery requests. After all, all they did was ask. It was the Judge who ordered IBM to do all that unnecessary disclosure. They have to be thorough and leave no stone unturned. Starting out without evidence, now that's a horse of ....

---
webster

[ Reply to This | # ]

Attorneys fined?
Authored by: Anonymous on Wednesday, May 18 2005 @ 09:39 PM EDT
Boies Schiller and another firm had to pay the defendant's legal costs-- times two.

Does this mean that if (when) SCO goes bankrupt, IBM might actually collect legal fees from Boies Schiller?

[ Reply to This | # ]

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